Economic inequality

by Jeremy Leaming

The severely conservative U.S. House of Representatives is peddling yet another effort to slash services for the poor.

As TPM’s Sahil Kapur reports “House Republicans are set to advance legislation to replace automatic defense spending cuts they agreed to last year with cuts to programs for the poor and working class.”

Yes, the House’s plan is likely only to be symbolic, as Kapur notes the legislation is expected to go nowhere in the Senate. Yet it provides, as if anyone needed it, another example of the conservative party’s extreme opposition to any policy that might raise taxes on the super wealthy.

Rep. Chris Van Hollen, (pictured) the House Budget Committee’s Ranking Member, in a May 3 report blasted the proposal for advancing “costly additional tax breaks for millionaires while finding savings by ending the Medicare guarantee for seniors, slashing investments that strengthen our economy, and shredding the social safety net.”

As noted here, a string of commentators have argued that the conservative party has been retooled to focus solely on protecting tax cuts for the wealthy, even as the middle class shrinks and poverty grows.

A recent study from political scientists at the University of Georgia and New York University reflects a drastically changed political party, noting that the “Republican Party is the most conservative it has been in a century,” NPR’s Frank James reports.

In a piece for The Huffington Post, Mike Lux said the political scientists “are underestimating.”

by Jeremy Leaming

If one really needs another example of how out of touch or clueless some of the nation’s super wealthy are, Adam Davidson’s piece on a retired multimillionaire for The New York Times Magazine provides it.

As Davidson notes the retired former partner of Bain Capital, the outfit that excelled in tearing down other businesses for a profit, is plumping a forthcoming book that extols alleged virtues of the filthy rich. Davidson writes that the “spectacularly wealthy guy” believes the “wealth concentrated at the top should be twice as large,” to spur slackers or “art-history majors” into pursuing outlandish wealth.

Economist Paul Krugman, in his Times’ blog, says the former Bain Capital partner’s argument “might have some plausibility if the era when America didn’t have such overweening plutocracy – the 50s and 60s, when the top 0.01% received only about a fifth the share of income that it commands today – were a time of economic stagnation and low innovation. In fact, the postwar generation experienced the best economic growth – and the fastest productivity growth – of any era in the past century.”  

Since discussion of the nation’s growing economic inequality, right-wing pundits have attacked or belittled studies showing that the middle class is dwindling, while a tiny few continue to become wealthier. In a widely cited article for Vanity Fair, Columbia University Business School Professor Joseph E. Stiglitz noted that the “upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent.”

While the former Bain Capital multimillionaire, Edward Conard, is no innovator, he’s not invented anything that has enriched the lives of Americans; he has invested in a company that uses less aluminum for soda cans. “It saves a fraction of a penny on every can,” he told The Times. “There are a lot of soda cans in the world. That means the economy can produce more cans with the same amount of resources. It makes every American who buys a soda can a little richer because their paycheck buys more.”

This is the gibberish that passes for an argument that investors should be celebrated and indeed helped by economic policies?

Dean Baker, of the Center for Economic and Policy Research, is unlikely to be persuaded. Last fall Baker scored economic policies that have catered to the super wealthy for far too long, and noted that those policies do redistribute the wealth – to the super wealthy.